LSE fosters Israeli tech
THE London stock Exchange has experienced a mixed week when it comes to floating companies. But it cannot be accused of lacking ambition following the implosion of its merger with Deutsche Boerse.
in spite of political and governance controversy, it has re-established its credentials as a hub for Russian natural resource trading with the public offering of hydro-aluminium conglomerate EN+ controlled by oligarch Oleg Deripaska.
this is the first Russian initial public offering in London for several years and suggests the economic cold shoulder for Moscow, triggered by actions in Crimea and Ukraine, could be ending. EN+ shares were priced at the bottom of the range at $14 each (just under £10) on first day of trading, placing a valuation on the group of £6bn.
Another sign that departing chief executive xavier Rolet has not lost his mojo yet was the generous welcome given to israeli Prime Minister Binyamin Netanyahu in London to commemorate 100 years of the Balfour Declaration.
the israeli leader symbolically rang the LsE’s opening bell before addressing a powerful audience, including several FtsE bosses. More disappointing was the failure to get two other London listings off the ground. the proposed £4.5bn float of the tV and mobile masts operator Arqiva was pulled amid claims of ‘market uncertainty’.
But with the FtsE 100 and 250 near peaks, and stock markets around the world booming, Arqiva and its investment bankers Barclays and Goldman sachs might be better advised to look more closely at the enterprise they sought to foist on investors.
Anything sold by the Vampire Kangaroo Macquarie, formerly the disgraced owner of thames Water, is destined to be treated with caution, especially as it was weighed down with debt. the other float to be postponed was Bakkavor, supplier of fashiona- ble hummus to supermarkets. At a moment when food producers such as Unilever and ABF are in the market for trendy, niche brands, Bakkavor may eventually be a better candidate for a trade sale.
A generation or so ago, israeli companies coming to London might have been offering hummus and Jaffa oranges. No longer. the picture painted at the LsE yesterday, under a banner proclaiming ‘innovation’, was very different. Rolet noted there are 28 israeli firms with a value of £15.5bn on the main market, a further 18 on AiM and the LsE was organising investment in at least eight privately held start-ups.
Netanyahu’s pitch was that israel, a country with no native car making, was now a world leader in autonomous vehicle technology.
Many people already use Waze (bought by Google for $1bn) to navigate. similarly, Google also snapped up Mobileye for $15bn, a record inward investment, and promptly injected 30 other autonomous driving applications into the israeli enterprise. the latest drive for israeli tech entrepreneurs is to dominate the healthcare space.
inside israel, tech entrepreneurs are pioneering systems which allow individual medical history, from cradle to grave, to be encrypted in a single chip on a card which citizens carry with them. it is now using big data to analyse the mass of data from an 8m sample of people – broken down into more accessible groups – to learn public health, disease, pharma and other lessons.
An established israeli software outfit, Connected Healthcare solutions, has just begun work with the NHs to see how its software can help UK citizens access the best healthcare choices. the size of the NHs historically made it a tremendous test bed for new compounds and treatments. israeli innovators recognise that and so do the big British pharmaceutical companies post-Brexit.
But it will require the Government to show willpower and a creative approach to drug regulation when the European Drugs Agency exits its current home in Canary Wharf.
Growth spurt
NAYsAYERs who worry that the Bank of England is piling agony on a weakening economy with its quarter of a point rate hike to 0.5pc have forgotten the UK’s capacity to surprise post-Brexit.
the latest purchasing managers index for services, comprising more than 70pc of the economy, shot up by two full points in October, outpacing consensus forecasts. the future index also rose strongly.
the data had analysts reaching for spread sheets which are showing a potential pickup in output of 0.7pc in the fourth quarter.
slowdown? What slowdown?